FSA takes directors to court over 'misleading' statements

By Dominic White

12:01AM GMT 11 Feb 2004

Three former directors of Henley-based software group AIT appeared in court yesterday accused of misleading the financial markets in the first criminal prosecution of its kind brought by the Financial Services Authority.

Carl Rigby, Alistair Rowley and Gareth Bailey were charged with four counts under the Financial Services and Markets Act 2000 when they appeared before City of London magistrates.

Mr Rigby, former chief executive, Mr Rowley, ex-sales director, and Mr Bailey, former finance director, are alleged to have issued a statement about the company's turnover and profits on the Regulatory News Service, knowing it to be "misleading, false or deceptive".

The statement on May 2, 2002, said turnover and profits were expected to be in line with market expectations. But four weeks later, the company issued a shock profits warning that caused the shares to plunge 80pc in a single day.

Soon after the once well-regarded group was forced into a £20.5m rescue refinancing that almost wiped out the existing shareholders.

The men face two similar charges relating to making a statement to the financial markets and two further similar charges of conspiracy.

Mr Rigby, 41, Mr Rowley, 41, and Mr Bailey, 35, all dressed in dark suits, were remanded on unconditional bail to appear before Southwark Crown Court for a preliminary hearing on March 2.

The FSA said it was the first prosecution it had brought using its criminal powers.

Separately, a company secretary who sold shares ahead of a sales warning by his company was yesterday fined £15,000 in the first case of its kind by the City watchdog.

Robert Middlemiss avoided a loss of £6,825 by selling 70,000 shares in publishing and communications company Profile Media Group, according to the FSA.